Initially planned for December 2020, the launch was delayed due to the Covid-19 pandemic.
"Four Indian astronauts are being trained in Russia. The first unmanned launch, the precursor to a manned mission, is scheduled for December 2021," Sitharaman said while presenting the Union Budget on Monday.
Two unmanned GSLV rockets will be tested before the actual human flight takes place.
The Finance Minister also said that the New Space India Limited (NSIL), a PSU under the Department of Space, will execute the PSLV-CS51 launch, carrying the Amazonia Satellite from Brazil, along with a few smaller Indian satellites.
Sitharaman also proposed to launch a 'Deep Ocean Mission' with a budget outlay of more than Rs 4,000 crore over five years. This mission will cover deep ocean survey exploration and projects for the conservation of deep sea bio-diversity.